Effect this measure will have on costs and revenues of state government.

The stated purpose of this bill is to exempt eligible seniors from payment of tax on heating oil in a private dwelling.

As written, this bill creates a refundable exemption from the variable rate component of the Motor Fuel Excise Tax for eligible seniors for heating oil used in their private dwellings. Also, the bill provides a refundable exemption from the flat rate component of the Motor Fuel Excise Tax on heating oil used by eligible seniors in their private dwelling. However, under current law, a refundable exemption already exists for the flat rate component of the Motor Fuel Excise Tax for purchases of home heating oil for use in any private or public dwelling. The bill defines an eligible senior as a person 65 years of age or older whose federal adjusted gross income is 150 percent or less of the federal poverty guidelines.

According to our interpretation, passage of this bill may result in a reduction in the State Road Fund of between $0.2 million and $0.6 million per year.

Additional administrative costs to the State Tax Department from the passage of this bill would be roughly $80,000 in FY2014 and roughly $20,000 in FY2015 and each year thereafter.

Fiscal Note Detail

Over-all effect

Effect of Proposal

Fiscal Year

2013Increase/Decrease(use"-")

2014Increase/Decrease(use"-")

Fiscal Year(Upon FullImplementation)

1. Estmated Total Cost

0

80,000

20,000

Personal Services

0

20,000

20,000

Current Expenses

0

0

0

Repairs and Alterations

0

0

0

Assets

0

0

0

Other

0

60,000

0

2. Estimated Total Revenues

0

0

0

3. Explanation of above estimates (including long-range effect):

As written, this bill creates a refundable exemption from the variable rate component of the Motor Fuel Excise Tax for eligible seniors for heating oil used in their private dwellings. Also, the bill provides a refundable exemption from the flat rate component of the Motor Fuel Excise Tax on heating oil used by eligible seniors in their private dwelling. However, under current law, a refundable exemption already exists for the flat rate component of the Motor Fuel Excise Tax for purchases of home heating oil for use in any private or public dwelling. The bill defines an eligible senior as a person 65 years of age or older whose federal adjusted gross income is 150 percent or less of the federal poverty guidelines.

According to our interpretation, passage of this bill may result in a reduction in the State Road Fund of between $0.2 million and $0.6 million per year.

Based upon available information, there may be roughly 2,800 households that may qualify for the refundable exemption proposed by this bill. The estimated average refund would be roughly $142. Those eligible seniors that would need paid assistance for filing appropriate documents to claim the proposed refund would pay over most of the benefit of the refund to the preparer.

Additional administrative costs to the State Tax Department from the passage of this bill would be roughly $80,000 in FY2014 and roughly $20,000 in FY2015 and each year thereafter. The additional expenses would include one-half the cost of an employee to review refund claims and for the additional forms development and programming necessary to implement the refund process.

Memorandum

The stated purpose of this bill is to exempt eligible seniors from payment of tax on heating oil in a private dwelling.

This bill would exempt eligible seniors from payment of the motor fuel excise tax on both the flat rate and variable rate components of the tax. “Eligible seniors” are defined as persons aged sixty-five years old or older whose federal adjusted gross income is 150% or less of the federal poverty guideline. The new subdivision (c)(19) exempts home heating oil purchased by eligible seniors from the flat rate component of the tax. However, subdivision (c)(9) of the existing statute already exempts all purchases of heating oil for use in any private or public dwelling from the tax. The new language in subsection (c) referring to the refund procedures is also unnecessary, as §11-14C-31 already contains language relating to these exemptions.